Chamber supports LR mayor’s push for sales-tax rise as election nears

The board of the Little Rock Regional Chamber of Commerce has endorsed Little Rock Mayor Frank Scott Jr.’s “Rebuild the Rock” salestax increase ahead of the Sept. 14 citywide referendum on the tax.

The decision was finalized earlier this week, according to chamber President and Chief Executive Officer Jay Chesshir. Officials did not meet in person, Chesshir wrote via email Thursday.

In a statement provided by Chesshir, chamber chairman John Burgess said, “We appreciate Mayor Scott and the Little Rock City Board of Directors for addressing our concerns regarding the permanent nature of the tax being proposed and are pleased by their decision to limit this tax proposal to a ten[-]year term.”

“Our board of directors has now voted to support the Rebuild The Rock initiative,” Burgess added.

When asked for comment on the decision, mayoral spokeswoman Stephanie Jackson wrote via email, “Mayor Scott is happy to have the support of Little Rock’s business community as we Rebuild The Rock.”

“We are all United in our goals to grow the economic market of the state’s capital city,” Scott said in a statement provided by Jackson.

Amid debate over the tax this spring, Burgess expressed concerns to the mayor about the provision — since removed — that the 1 percentage-point sales-tax increase would be permanent, and questioned other elements of the tax package.

Burgess wrote to Scott in late April to share a list of questions and concerns on behalf of the chamber’s leadership and “Fifty for the Future” members after dialogue with the mayor.

Scott’s proposal originally called for a permanent salestax increase.

But in the email obtained by the Arkansas Democrat-Gazette, Burgess described the absence of a sunset date for the capital expenditures laid out in the

tax as “the biggest single issue with the proposal raised by our leadership group and it’s the single biggest issue that gets mentioned by those in our social networks.”

Additionally, Burgess argued that other cities and counties in Arkansas “very successfully manage by funding capital expenditures through fixed-term (sunsetted) taxes.”

“Why can’t that portion of your proposal be converted to a 10-year sunset tax, as your proposal states that all the identified initiatives will be addressed within the first 10 years, anyway?” he wrote.

Burgess is the co-founder and president of the I.T. firm Mainstream Technologies in Little Rock.

In May, when asked for comment on Burgess’ email, Scott provided a response memo addressed to Burgess that was meant to address the businessman’s questions and comments.

On the subject of a sunset date, the memo said, “Our timeline for Little Rock’s growth and greatness goes beyond 10 years. Long-term, equitable growth in Little Rock should be the primary focus of city government in service to all the residents.”

The memo went on to say that the city has “made strides toward this goal in the past, but those periods of investment tend to be followed by periods of stagnation.”

In June, the mayor’s proposal was given the green light to go before voters in a special election because of a 6-3-1 vote by members of the city’s Board of Directors, but only after the late-stage addition of a Dec. 31, 2031, sunset date as well as other changes.

An estimated $530 million over the 10-year lifetime of the tax would fund construction projects and initiatives ranging from a new indoor sports complex, public-safety vehicle and apparatus replacement, street resurfacing, a senior center and more.

An existing three-eighths percent (0.375) sales tax used to fund capital improvements is set to roll off at the end of this year, meaning that if voters give approval, the overall local sales-tax rate will increase by five-eighths percent (0.625) beginning in January.

When accounting for state and county taxes, the total sales-tax rate in Little Rock would increase to 9.625%.

With the referendum roughly one month away, groups have lined up to support or oppose the tax.

Scott and other supporters of the tax have arranged a “Rebuild the Rock” campaign committee.

Little Rock Vice Mayor Lance Hines, who represents Ward 5 on the city board, has signed on with three other individuals — including a former treasurer of the state Republican Party — as directors of an opposition committee called “Responsible Taxation for Little Rock.”

In July, the advocacy group Arkansas Community Organizations told the Democrat-Gazette that members are opposed to the tax increase.

“COVID cases are spiking. People have not recovered economically,” the group said in a statement attributed to Robert Daugherty and fellow board members. “It is a bad time to increase taxes on our groceries.”